Actually banks make massive mistakes all the time and something like this is quite possible.
I personally handed my bank manager (who was nothing less then a regional manager for Nat West) £5.5k worth of cheques to open a new account at a meeting in my office.
After 3 weeks and no show of the cheques on my statements, I contacted him to find out that not only had he not deposited them, but he had managed to loose them to boot. Seemed odd then that they had all been cashed!
Back to the point:
To declare yourself deceased is a very serious criminal offence especially in respect of financial issues (I think) so I would guess a mistake is more likely, unless the individual is a complete idiot (which is always possible)
.